Tanzania Daily News (Dar es Salaam)

9 November 2012

Tanzania: Citizens Rewarded for Reporting Tax Evaders

TANZANIA Revenue Authority (TRA) has pledged to work together with good citizens who reveal names of unfaithful business men and women escaping to pay taxes.

That is why TRA has developed a system whereby such good citizens are awarded some cash after revealing names of business people who use 'panya' routes while conducting illegal business.

Recently, Mabibo Beer, Wine and Spirit company which is the sole company holding a licence to import Windhoek beer complained that there were some companies importing the same beer brand without paying due taxes. In a statement issued recently, TRA has vowed to arrest all business people who are importing Windhoek beer without paying due taxes.

According to TRA, good citizens who know names of the people who do business without following the laid down procedures should report their names to TRA, so that the law may take its course. TRA tax payers' education manager Diana Masalla says that her authority has vowed to keep secret names of those who reveal names of such levy evaders, and people should not fear when doing this noble task.

She added that TRA has been awarding those who reveal names of those failing to pay taxes accordingly. "If one gives true information leading to the arrest of the person evading tax, the one who revealed that name will be awarded 3 per cent of the total amount to be paid to TRA. Mabibo wine company should bring us the names of the people/companies that have evaded paying taxes," she said.

She added that TRA investigation department is ready to receive such information for research to know the truth before relevant measures are taken against those involved. TRA Tax evasion Deputy Commissioner Eva Mmasi admitted that it was not easy to fully control illegal business that denies the nation due taxes.

"We are working hard to plug such holes of corruption," she said. "We normally use different ways when dealing with tax evaders but such people also invent new ways to counteract our efforts. When we get right information we shall arrest these people who go against our laws," she said.

Taxes collected by the government are used in different ways, including road construction. Tanzania needs every possible tax to be duly collected from all imported goods which are taxable by law. The government does not expect to have people dealing in contraband goods, simply because such conduct disrupts the market, discourages potential investors and denies the government the revenue it deserves.

It is gratifying to report that a score of stakeholders, including Mabibo Beer, Wines and Spirits Ltd, have strongly vowed to fight contraband business and tax evasion. Contraband business should be fought hard by all well meaning people in the wider society in order to avoid the negative effects such business causes in society. This is not an issue for law abiding business people alone. It is an issue which the whole society at large should be united and fight against, says James Rugemalira, who is an International Independent Consultant based in Dar es Salaam.

Mabibo Beer Wines and Spirits Ltd has once again reconfirmed that their company is the sole promoter and registered exclusive users of the Windhoek beer trade mark in Tanzania. In order to establish the identity for legally traded Windhoek beer in Tanzania, Mabibo embosses code number MB66 on all her imported Windhoek beer, says Mr Rugemalira.

According to him, this means that all imported Windhoek beer with code number MB66 is the bona fide Windhoek beer for Tanzania and it also means that the beer has met all customs requirements, including payment of required customs duties and taxes. Mabibo sought to formalize legally the Windhoek beer trading modalities in the country and therefore submitted the documents to the Resident Magistrate of the Kinondoni District Court.

As a result, Mabibo has been assigned the exclusive use of Windhoek, and after seeing that the documents were in order, the company was given decree which pronounced that it would be a criminal offence for any person to sell Windhoek beer in Tanzania which does not bear the code number MB66 without specific written consent from Mabibo Beer Wines and Spirits Ltd.

The obvious advantages for establishing a legal basis for business conduct are many but the most important are that the consumer is guaranteed a safer product when the source of that product is legally recognized. According to the law, legitimate customs duty paid and duly received by government coffers is for the benefit and welfare of a wider society in the country.

Legitimate business promotes competition in the economy which is vital for business growth, investments growth and inherent interests of the consumer. Mr Rugemalira says that contraband business has very serious negative effects for Tanzania. For example, those who import contraband Windhoek beer make the government lose around 10,000/- per carton, which by quick estimation is a very big loss.

Besides stunting business development in the country, he adds, contraband trade discourages investments and it does not do justice to the society because the taxes which the consumer contributed in the price of the contraband item do not enter into government coffers. In, short contraband trade is done on the basis of deceit. This is why at the meeting held in August, last year the Tanzania Editors Forum (TEF), the Tanzania Revenue Authority (TRA), the Tanganyika Law Society (TLS), the Tanzania Police Force and Mabibo Beer Wines and Spirits Ltd agreed to implement the Kinondoni Resident Magistrate Decree that outlawed the sale of Windhoek beer which does not bear the code number MB66.

In order to give Notice before fully implementing the Kinondoni Resident Magistrate decree in an orderly manner, some measures of lenience by MABIBO were offered. Traders with Windhoek beer which does not bear code number MB 66 were supposed to bring them to Mabibo company before September 30, this year and get in exchange Windhoek Premium Lager Beer with the required code No. MB66.

Mr Rugemalira says that there are people who appear not to want to take advantage of this opportunity, thinking that they can continue with contraband business. Recently, Mabibo Beer Wines and Spirits Ltd became aware of traders who are involved in the con business of contraband business. For example, Mabibo Beer Wines and Spirits Limited now know that there is Windhoek beer bearing some code numbers which are contraband. Such business people whose business is based on deceit evade taxes and cause the government not to carry out her responsibility to the public as it could have done if all taxes had been paid, says Mr Rugemalira.

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